rthe lanatio us Os 10. Use the following data to determine the total dollar amou
ID: 2589484 • Letter: R
Question
rthe lanatio us Os 10. Use the following data to determine the total dollar amount of assets to be classified as current liabilities: Eddy Auto Supplies Balance Sheet Cash Accounts receivable Inventory Prepaid insurance Stock investments 31-Dec-17 126,000 120,000 210,000 90,000 255,000 285,000 Accounts payable Salaries and wages payable Mortgage payable Total liabilities Common stock 165,000 30,000 270,000 465,000 360,000 750,000 1,110,00 Retained earnings Buildings Total stockholders' equity 339,000 0 Total liabilities and stockholders' equity Less:Accumulated 1,575,00 60,000 279,000 Depreciation Trademarks Total assets 210,000 1,575,000 a. $195,000 b. $165.000 c. $270,000 d. $30,000 11. Wang Company h ad the following transactions during 2016:- - Sales of $10,800 on account Collected $4,800 for services to be performed in 2017 -Paid $2,600 cash in salaries for 2016 - Purchased airline tickets for $600 in December for a trip to take place in 2017 What is Wang's 2016 net income using accrual accounting? a. $8,800 b. $13,600 c. $13,000 d. $8,200Explanation / Answer
10.
Current Liabilities
= Accounts payable + Salary & wages payable
= 165,000 + 30,000
= 195,000 (Option a)
Note: Mortgage payable is long term liability & not current liability, so excluded
11.
Income= Sales = 10,800 ( whether or not cash is received)
Exp = Salaries = 2,600
Net Income = 10,800-2,600=8,200 (option d) (as per accrual basis)
Note:
1. 4,800 is advance receipt, which will be considered as income in 2017
2. 600 is also for 2017. It will be considered as expenses in 2017, if the trip is for business.
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